Measuring Poverty Using Income and Deprivation Indicators: Alternative Approaches

Abstract

This article compares the alternative routes followed by Hallerod (1995) and Callan, Nolan and Whelan (1993) to identify those ex periencing exclusion from the life of society due to lack of resources by the application of a combination of income and deprivation cri teria. Hallerod's methodology involves a con sensual income poverty line and a deprivation index containing all 36 items available to him, weighted to reflect the extent to which each is regarded as a necessity. Our approach em ploys relative income poverty lines and a sub- set of indicators relating to 'basic' deprivation. Applying both to a household sample dataset for Ireland, we find very similar numbers, about 16 per cent of the sample, meet the two alternative income/deprivation criteria, with about 70 per cent of these meeting both. Many of those meeting Hallerod's criteria but not ours are elderly single-person households, while families with children with an unem ployed or ill/disabled head predominate among those meeting our criteria but not his. While the former group have particular diffi culties with poor quality housing and housing- related durables, the latter are more likely to be experiencing generalized deprivation in a situation where housing is subject to very specific life-cycle and State policy factors. The results from both approaches lend support to the case that using both income and depri vation information, rather than income alone, helps in directing attention towards the most important processes producing poverty.

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